Sarvabhaoom Hindu Dharam Srichobees Avtar Tatwagyan Mandir Trust Vs CIT (Exemption) (ITAT Indore)
Charitable-cum-Religious Trust Not Fully Barred – ITAT Remands 80G Approval for 5% Test- Minor Pooja Expenses Won’t Kill 80G
Charitable-cum-Religious Trust Not Fully Barred – Minor Pooja Expenses Won’t Kill 80G -ITAT Remands 80G Approval for 5% Test
Assessee, a public trust registered u/s 12AA since AY 2017-18 & holding final registration u/s 12A/12AB from AY 2022-23 to 2026-27, was engaged in charitable-cum-religious activities. It had been granted provisional approval u/s 80G(5) from 08.12.22 to AY 2025-26. Subsequently, on application in Form10AB for final approval, CIT(E) rejected the application on the ground that Assessee was a religious entity not eligible for approval u/s 80G(5) as per section 80G(5)(ii) read with Explanation 3. Simultaneously, provisional approval was also cancelled.
Before Tribunal, it was argued that the trust was charitable-cum-religious in nature, as evident from order of Registrar of Public Trusts under the Madhya Pradesh Public Trust Act, 1951 & from the order of CIT(E) itself while granting registration u/s 12AA. The trust carried out multiple social, cultural, educational & religious activities with majority being charitable in nature. Reliance was placed on section 80G(5B), which overrides section 80G(5)(ii) & provides that even if an institution incurs religious expenditure not exceeding 5% of its total income, it shall still be deemed eligible for 80G approval. It was contended that religious expenditure of the trust was limited only to minor “Poojan Expenses” & never exceeded 5% of its total income. Therefore, the rejection by CIT(E) was unjustified.
